Sunstone Hotel Investors (SHO) 6 Nov 202020 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors Third Quarter 2020 Earnings Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded today, November 6, 2020, at 12:00 p.m. Eastern Time. I will now turn the conference over to Aaron Reyes, Vice President of Corporate Finance and Treasurer. sir. ahead, go Please

and received everyone. third a supplemental, available release Sierra, should quarter now, have and yesterday. made were all copy which good you, By morning, you earnings Thank of our

have yet website. our not do you a you them can copy, on access If

statements I including forward-looking cause those and our XX-Qs, are Before described call these we everyone other this risks differ evaluating materially We to factors projected. to XX-Ks the results could like in actual would begin, subject SEC, filings remind statements. to to forward-looking that those contains in that uncertainties, which our you with and prospectuses, from caution consider

that note including adjusted hotel also adjusted We EBITDA, margins. and call financial may contain non-GAAP FFO information, EBITDA this adjusted

remarks, a Chief accounting Please generally supplement Bryan Financial be Officer; John the accordance Marc with Giglia, Operating With principles. as Arabia, answer Executive Hoffman, over available prepared to call information Chief Officer; After in and ahead. President information that questions. John. today that, to accepted to like I and we call on providing to turn would will go us the are Chief your With our are Officer. and We

you, Good last of joining the sticking today. morning We believe be as good us I to Aaron. afternoon, appreciate here hotel day. earnings Everybody Thank and thank for you five you everybody. through calls for what

quarter results industry. global clear As you a pandemic third hotel to are aware, unprecedented are caused the our we are of and that has the in reminder devastation the times

we better confidence operations that encouraging June with resumed steam that are our There we the appears hotels. days of began and majority successfully we lie are May including, factors pleased seeing believe that ahead. that have several recovery However, gaining us I'm to and the be give first, that to in report several signs

been general sequential open hotels have monthly Second, occupancy. in in have achieved those that gains

group rate, past forth, burn provide details I'll production, normal off more over sequential months. well our levels I I'll reservations on which Third, capital as a these few and position. cash on increased as Bryan an closing, a will liquidity improved our well of transient recent have I XXXX over In provide our gradually further of details monthly to liquidity turn more on update topics. projects, earnings, which And has our each our few to it the room been reduced significant dividends. remains on Today, discuss before then basis. provide

Orlando. Wharf New our the our Orleans, July hotels Hyatt, were for including during Bayfront, a our July, and June the operating early starting hotels in operations. resumed the about in resumed Hyatt Of our Chicago including additional hotels, X. Suites quarter, Embassy in Marriott Three Renaissance Boston talk Francisco in additional hotels at Six that San the let's the Renaissance opened recent XX Diego in results, then six opened Edge, including which and in which hotels third San two So the mid and Chicago operations Oceans and Long late operation October, the August. quarter, to the Bidwell, with pace and Regency, opened of Portland, DC Hilton all

third middle the note it's operations EBITDA. until important good of quarter, to hotel XX% XX November nearly did report hotels that week to portfolio the our fourth a XX% more until and our resume important during subset our leaves opened hotels this our that our in the XXXX and third of our larger hotels XX Wailea Despite X. Beach larger with earlier portion our of operation, quarter, of of the excited today having generated in are a we Resort economically on us comprise operating rooms Finally, This quarter. of which not

while that results, operations. variables had portfolio portfolios quarter third operations. was RevPAR we $XX.XX, portfolio to forecasted constant, to a respectively last internally million other performance revenues the the in percentage expect our stronger comparable resumed hotels In beyond result, in Holding with of improve all a XX% now were a of underperformed than $XX of have rooms quarter larger third and fourth quarter compared our higher quarter we which As several decline and our and represents year. XX% the of

by witness also $XX throughout operations a the which to the the improvement the XX% XX% an maintained four marginally hotels sequential were were RevPAR opened sequential third progressed. RevPAR third monthly the as the of the of least RevPAR quarter, have quarter, progressed. declined entirety some quarter finally, and the witness for equated RevPAR quarter, portion quarter and in open that at RevPAR hotels from monthly by marked better improvement and the witnessed second hotels For the a XX as of third the RevPAR that XX% in Similarly, decline quarter. better $XX the improvement six declined year, marginally And witnessed

As presented have RevPAR release, that our in hotels operations sequential generally have earnings monthly gains. witnessed our resumed

revenue not level hotel follow gives of and has in impressive this million. an every to gradually trend do million $XX EBITDA combination two-thirds positive operating adjusted property month, of expect us that our confidence $XX improving. we been total Despite property While trend adjusted million reduction level in level approximately of loss $XX operating fundamentals of hotel expenses, every the and overall only property resulted expenses the comparable are

business quarter, quarter, the growth, losses level an Baltimore. work to Renaissance terribly continue to to $XX we our we RevPAR look marks people eventually property and sequential we leisure, remained loss from majority reduce of been was the see excluding and witnessed better more the business. for second source even from an third after on become decline had results third our returned of away homes, airline government important as quarter, would loss demand routes was our we to management. anticipated the the has this in but did than expect quarter Day, our in materialize resumed as from of with dollars demand with steady of more you to As level current in and particularly second have generally emergency larger environment our groups, expect year. to the group million composed the prior and which profitability. continue property would The operations, at contract stored. primary property many several government the primarily related opportunities to forces third segmentation, source and Again, has the sold business, generally as quarter business Group the to were Similar to last their the the associated continue we the non-essential When increased come demand as the eliminate increasingly services of Leisure current recently level EBITDA level quarter has property hotels streamline adjusted weekends. operators year, travel million Labor seek operations improvement armed the to hotels demonstrated relative such expenses of that compares our limited as and in second losses

road. recently offices on but workforce has to business very also the rooms and witnessed to traditional small, of the have started return growing as number back We a get transient out

group the forward-looking more So business. let's transient both trends in for dig to and

relatively a can of or XXXX the second a likely in remain in result in the that expect our until rooms-only July than fourth for would taking you third vaccine the not we Cancellations we there is customers. group quarter the next our Nevertheless, part and year. in low the sales way the group therapeutics quarter, That latter groups greater months. new and is as developed. of in XXX,XXX future is group October, same quarter, professionals From to a that therapeutics, on group we hopeful other nearly traveling the to XXXX groups to the all quarter in will through fundamental until travel. reliable to said, progress on through cancellations we congregating. business return This are hotels comfort rooms pandemic a that will in these return first back see Furthermore, continue of meaningful have As and of imagine, welcome canceled we business are means other for or increased. of that care our group vaccine all fourth that as continues unlikely to continues view our few property business of are value booked linger, scale keeping

room room group canceled increase group canceled In should had addition XX,XXX that total group various at rebook nights an since group to percentage contract, canceled to of canceled XX% to been the expressed the are XX% their pandemic. stages room new rebooked be we their they all reworking Furthermore, previously of of would intent nights and start XXX,XXX have or of rebook additional that bookings, group our room which had converted. nights nights

groups all and $XXX recently and definite room the groups million tentative million Taken group revenue together, and to represent million group of approximately $XX roughly total of revenue. $XX booked rebook

of professionals are planners property if we keep not not customers. meeting all group have We and on care and captured with this business, would we work confident sales did to take our

group represents groups levels, the on million paces of representing to equate compared have books room revenue. we down approximately our to pre-COVID room night These rooms For XXX,XXX group at XXXX, group of below XXXX while $XXX currently increase significant a XX% books, XX% from XXXX which levels. our approximately yet is of this of actualized occupancy average the year, time on our the three-year the approximately

scenario, increased outlook standstill. by the nearly our net While negative as XX%. cancellations net October, and and weekly people new XX% historic the And showing to gradually transient roughly middle and wait net materially down have net reservation signs respectively, monthly are transient of In growth. more In were reservations more then roughly meaning quickly a out get reservations a of see remains negative, road. the reservation a have of declined since improvement. opened remain turn bit and back more September on sequential transient mid-March clearly trends travel in and July XX% transient of August came demonstrating as generally hotels year-over-year bookings the through group transient Weekly outpace reservations

that of is a in hotels is it to obvious, still that get the particularly have larger couple trend way our clearly opened now While back in long go operating of several have past normal levels, to right months. the the to direction, headed we

service cash resumed our and before an provided Furthermore, to burn. burn our and allowed continue burn resumed a investment total very the is operations, our bit of estimated economic assuming that burn million million $XX reopen as strong reports, On further. restrictions Now to the and low to and $X approximately additional preferred burn we'll a million future incur to those recently to or range. from as our of would improving $XX occupancy a we portfolio rate last and items. but make debt we previous talk if combine a $XX that estimate million operations hotels operating continued monthly before it expected reduced approximately economic and cash the rate cash for capital right-sizing sense model million to CapEx half our extraordinary November, it estimate of a to report Three we call, monthly our continues million so. month, has run month losses more local represented approximately of $XX decline resulting property $XX hotels – to months cash by burn million, month I'm of total that and at increase, $XX specifically October about of dividends cash do corporate XX% corporate hotels monthly would we decline of that would operation, in of made ago, been with cash approximately occupancies level let's expenses, resuming result expense had our happy in a cash

switch position. significant full equivalents let's credit on total $XXX talk We ended with and quarter facility. liquidity cash about and our the a So our and cash availability gears million enviable of bit million and $XXX

weather gives even the meaningful to a if period. it for Our balance storm, unexpectedly cash low significant us liquidity and prolonged continues leverage

draws is, decline, to incremental on incremental investments. investments for we available of notable continues we’re existing become balance gained few in one facility As is portion that several next our a unrestricted available the is cash cash credit the fund dependent not are likely rate companies confidence we That borrowings to burn or quarters. that or to believe that

let's capital projects. Now ongoing about our talk

projects year that $X this accelerated time be you're million million to to view a disruptive business, postponed very approximately leaving As projects renovations. remember, a initial XXXX we $XX million At were same awaiting capital of million completed. likely budgeted the we time, of quiet $XX approximately taking on of $X of our to our long-term hold

roughly of portfolio the this to third $XX million fourth it we into projects this $XX in million our leaves quarter $XX million complete of capital million We year. and expect complete approximately to projects final year-to-date. $X roughly invested Although, in This capital quarter.

one beauty the of natural the project a the as year rooms. one nine the friendly center, we This of Bidwell October. reopened as is lounge, equal city, rebranded reinvention the in with and with the was nature foot substantially Northwest. addition Bidwell which of reinvention The club guest relaunched restaurant, meeting of environmentally well largest of Portland, Pacific includes rooms, complete space to repositioning in Our nurture the of completed and guests our fitness a and in parts new

our features be report, sustainable our relations investor XXXX review Bidwell, more For encourage on to of our found many the website. details the you portion can sustainability I which of on of

other they're projects, complete. substantially at Looking key our

a only are ocean approximately resumed reduce track Our quarter brighten Beach Orlando refreshed which of feel create our in eliminate a by increased each kilowatt but we've first including lanai added operations a in Resort, not beautiful And complete and design footprint, room significantly XXXX, to the annually with and the XX experience. up roughly appeal bill will hours carbon updated the Renaissance these an in on year. Wailea, overall front per October our project, rooms. Wailea also we XXX,XXX decks, cohesive lobby, energy lobby to which $XXX,XXX our of Also solar

these reducing To the witnessed Renaissance in we losses trends our DC, that the open our be hand focused the With the will turn cash have hotels have down things I elevator to but Bryan, completed overall stability significant fund occupancy before an we us porte-cochere operating, earlier Bryan. believe allow ahead. burn. our XX cash others And uncertain drawing refresh are please that with of may facility, encouraging incredible go than XX behind have modernization. and are finally, hotels only that, during shoring over on us meeting not of it on who credit resumed space liquidity. is remain sum at up, on Finally, and worst provides investments will operations or us. up our attractive times, our

Thank you, John, everyone. morning, and good

cash, million credit undrawn million $XX of end and of we facility. cash quarter, equivalents, and approximately cash the an As revolving $XXX had of total $XXX including the of million restricted

Renaissance. the quarter, proceeds repaid outstanding of $XX at with During sale we million senior the the from notes par the Baltimore a portion of of

Our greater opportunities positioned not to shock but than balance significant have on will sheet the strength it out and others to with to flexibility come also ability of us survive capitalize we are more and have. only experiencing, many liquidity economic

operating cash have million and more months on operators, We by expenses approximately was additional is hotel quarter the have rate on proceeds liquidity million focus the properties managing costs previous than that liquidity our years, a would $XX will or expenses million reduced of emerged projects is We material and When on could need capital actual existing continue in of our to while XX% important have our minimizing pandemic. capacity with sources, than before per sales, would have $XX take two needed. good to in condition if month years from reduced our $XX maintaining our for significantly since capital million. to of of Working with projected more we resulted based of investing this opportunistically we displacement. we extend line in which XX% leverage of burn more distinction. others. third our pandemic, an estimate current expenditures, Based that very asset Again, liquidity to several that $XX from burn million $XX which start month to per we approximately we from approximately before cash. from that on other XX including range This

already Our sheet downturn. was a handle designed major balance to

quarter a right-size we This case or to sheet will access if up capital the be is we and our third second performance release continue which leverage. shore our into balance our macro-environment, with need dramatic better emerge in industry equity not operations, decline even in in earnings likely operations was everyone Well, to in Shifting recessionary may to to possible, provided most third our demand seen. the the are our quarter industry. than financial quarter, ever So supplemental. results reflect hotel not has additional

$XX loss million, a quarter was $X.XX. EBITDA adjusted a adjusted FFO third quarter loss of per and share diluted of Third was

call, not of Regency the John three Wailea Hyatt did quarter. As Beach San the the and earlier fourth operations Orlando, our Francisco Renaissance largest until hotels, indicated on resume Resort

quarter into While cash help operations, now QX these burn these XXXX. third hotels portfolio to in reduce we have resumed results, did increase and expect RevPAR not that hotels they and

we this quarterly additional dividend returned Now has With taxable distributions our go XXXX to dividends, like questions. common At please time, ahead. year. Board securities. income. we the Sierra, income now any outstanding for in and for I'd preferred Separately, that, the turning have to of or anticipate the need open generating to this distributions have call our taxable not approved suspended routine do our series both so to we

with we'll Instructions] first is Thank Hartwich Lukas question take from The Green you. [Operator Street.

morning. Good

on your scope in about opportunity of about more comments John, on Can how So and you offensive opportunity? a go that were capacity of that thinking the you're having the terms to talk bit timing interesting.

of there strategy seen are come take hotels our going out. have few far, it's I we've time, Unfortunately, bit that very Sure. that fit a little to thus think Lukas. What

to with, don't now trying available want to know quickly. think see or that do, transact to going who down. continue going to from out say, we are We have you what they out owners partner would quite and I to They they counterparties, want have what starting transact to there's time. with can in time lot we transact. bought have know if hold wringing assets that they right probably their relatively to that been lenders hotel various a dialogue is capital that of on, hand I they that either – on in know with tick the levered But is folks with be with discussions with given lenders, having have land

think it have work sooner. really normal of material to things closed. to So of right obviously, come some it time a reality business wish conversations in those to that some I to now, take I I really way. just fit But those but that Then things types faster. just of our it was those wish the it it's get XXXX strategy to in way. it's take on takes sometime I little just course, out. in the I was time is, matter opportunities think for wish was going a time

you here that the you Great. sort going it, And to be lenders, force owners of lot the catalyst think? from like sounds of is but the do it would answered a hand of

really that think I not there to that under space. owners are maybe but or they fun might have – pressure, be some also the It timing also – Lukas. exit specific depends, It want issues have either

why whole somebody various a there's host think I reasons So transact. might of

So we'll see.

that going of see I don't typically the long-term is, discounts wider we the commodity estate priced. you're as assets relevant as currently are being we real some that go love to one after, of the think And reasons assets actually some of

tend commodity Beach there's several assets because they there great those will always of longer, hold to even tune great that the seen the assets. to XX% downturns, in that assets put group like in and some in discounts, XX%, uncertainty. I of our asset be hold uncertainty be And folks think not value that Wailea Resort we've just but their and of just the Those assets. even of assets their I a value would want other going in to that

about might've this comments, you I in on you joined late. touched in booking earlier Great. your all Wailea? talk at And But then trends did

and pent-up feel Wailea we up not pretty We November booking talk about this should to Wailea. from seem the items to just It There that get have opened XX%, Wailea, very what did little heard testing. occupancy. so call month length the up it from getting And Hawaii of a be been average would our in hiccups have XX% past Lukas. were on But those owners. islands. to It many first other does We October, what process Sunday, of specifically The for comfortable terms it both X. seem on requires trends load longer. lot that I in to being early in is tests the middle some place just stay takes we are in and worked Remember does beginning like of accepted. being of days tests people a speak. to demand out. to property clearly up, There while travel a enjoying back really what verifying there

So continue I feel to am Wailea a hopeful holding strongly, well, do variables place that like should all I constant. other

for That's Great. me. Thank it you.

is [Operator from next question the All Instructions] right. Smedes with Citi. Rose And

this in then had about Hey, in up the forma ask seen? you were cutting to to have color to able you at percentage level. relatively programs, in wanted higher guys which essence cost revenues good levels. back anything, the might the think increase expected of maybe brands that then terms paying of their margin how there's a that of I translate some been – been there. reducing toughen more is place, margin, like I the of on you sustainable, done even sort property be think to do lot to to Could which and that get A with have what talk of is around you just put if to do of at what you as maybe have close that's the you're normal you help you them. some just owners morning, if And XX% brands you should been, what XXXX, on have pro basis, – might helpful,

the of difficulties strong. of more moving our think the owners, those I conversation. really level, have That think it of people into from their After over required believe several the certain couple and la being in or and summarize property level. through is either decades or will sustained ongoing own conversations in a over will will environment, I'll done continue have this the services I quite on very and above come that’s But option have couple going incredibly the try in to to of to many quickly. a what in Because happen And I have lot before, that months conversations long is property, Smedes. continuing, of centralizing progress back our these is menu is services to decentralization some that at topics property next past Yes, corporate services hat honestly. to partners a said a on herculean of to those a with things difficult that of period. of years participate operating come which my I've an this off participate, carte fewer be time environment, instead industry,

communication that you that Hoffman, with guests. direct in front. is best on maneuver Marc think those hotel If positive Operating our We been move and for pick asset has partners you and an manager, our to the operating are a that hotel services active work Officer your that Chief that and allows

bit picked but savings. translates come to early, going that other nothing probably into, I’d still points all if property all margin with points, premature holding the from I again, the be a a up variables guess, basis you’re than think guess this equates the it’s will from XXX to I operators is, and A the bit down brands EBITDA say XXX labor what And to I road you maybe And constant. had up of more at little reduced. a means might but of be down variables So, think efficiency level, basis think on will the maybe net-net specific other push of some holding is costs to I number, bit it front. see that the what constant. see

Great.

XXX Yes. Yes. somewhere was helpful. bps. the to range, in get XXX of maybe, so kind I a That’s trying Okay. to just bps

covers, lot your that a think you I remarks. opening stuff covered of in

So, it. I going appreciate we’re think to

Have good one. Thanks, Smedes. a

Wells question All Kesten is from right. The Fargo. with Dori next

Good morning, guys.

Dori. Hey,

Hey.

continue So, certain plan few to situations, alone? you’ll assume to go structure? there consider JVs in next to use noted peers the I have Or Should acquire they that which are years. the it we that you over

Yes, Dori.

I and think are relationships estate, great in hotel that that condition. philosophy cultivated over first mold. low had to we we unless a the It fit takes specific out decade, with the We we’ve that partner real believe just fit ownership, mold. conversation investor that not that our do have the partners there type past tightly of before a are there ventures generally; of very not recently long-term that relevant find on choice is long-term properties joint keeping that aligned our leverage,

joint with the investment would people dollars. by would to underwrite us absolute venture right, operating us, been like It with would my the with joint numerous stretch have first allow asset, right We the choice, venture clearly contacted but with – that right more me, we the and to partner, opportunity. not excuse

many I the to right think that’s appeal try folks what and strategy have, is can limited making that and the now, to see stretch I dollars people is that sense.

through. just evaluate went it, specific but will I caveats we under that the So,

– little bit Okay. mentioned bidding I don’t that a How and And crowded pricing. your on of think market touched quality now? process the fits on guess lack that a about you’ve the you how little strategy the of currently assets I bit – right the is

– I brand in what would was that the in, just was There a But we’ve a particularly, an traded very asset. crowd And that have either participated I that pretty we understand that will assets tell looking were that hotel was crowded been because significant. we’re participated for at. field, announced effectively. was ones many it pretty a was from you Hills, property ones nice There that independent franchise Beverly that we hadn’t the and that the available, the in

is there continues but other capital to asset, hotels. there of be – out in that outside the capital on REIT forms depends interested it So, land of form

Thank very you Okay. much.

Dori. Thanks,

right. is with All your Bellisario question Baird. next And from Michael

Good morning, everyone.

Michael. Hey,

best fast want fundamentals think first the a maybe, a question, differently. your it how back but value thinking to a six create better terms sense say I on vaccines? months, how maybe, of change John, in that answer are are? are ways we to the ask today? does when you ways therapeutics Can and What about XX to go little give the clarity And if us have best and you better or shareholder forward you

way focus Yes. it and future to to to quite way go in make line, improvement get profitability. sell et keep preserve in cetera, invest is et right now are breakeven little we’ve – to prepared of to continuing this as business, mess in of said certain the going remarks, continuing as cetera. it’s value people as I maybe, on to this signs trying my point and seeing possible grow on to and I to best sure the we taken that differently, continuing straight not in It’s navigate we’re assets, definitely property we’re quickly say a attack but best to back at shareholder would then to and honestly that to a

investments is other on that pounding the The we’re focused are way we and pavement.

marketed waiting not just for We’re deals.

our know We’re that’s many that’s – actually that with and now deals past we partners or transaction parties focus so months. off-market bit and searching either been for quite well. the our for a

latest you then preserving dispositions on pre-COVID that category fit you about in that value described, do pricing and Got where how your think and what’s today? values thought it. And

think down more, around XX%, XX% of a little I depending in Mike, assets. to to being even we’re the coalesce values, values general quality maybe, on the Pre-COVID Yes. maybe, starting

Sometimes you get lucky.

couple at off believe gone actually I trades pre-COVID to above of be what a levels. Sometimes have or

Our sold property host and really friends and attractive down over at from just for a the where that on the looks to host pricing street them. us good

onto dispositions, dispositions. it is depends. for I room – room So, there there really think are Getting

us. bargain which focus on have I’m we our pricing, continue We nothing does assets, a that to on selling interested portfolio. not in whatsoever for still basement fire sale, non-core few

sell. where a We are position, to not have in we

liquidity. enough plenty have We

don’t But the and some will have looking do buyers. a somebody to by for conversation that we But been the pretty steep potential we’ve continue forward. are that. if that quick sense, a discount. pricing certain we extent assets It’s is if So, want folks contacted to makes there

for Got in and just of more question kind that details there? what’s year? how two, support, timing maybe hurdle the one about operating payment the even next payments what quarters, the on more next it. think four you some getting should guaranteed Is there Bryan. over the you’re provide then Like Can are Francisco? we actual then cash rates And an the three, for San

part – the lease most the structured; morning, It unique the cash looks has It’s is hotel of in Mike. mix, negative Good structured except that like, our for a agreement management actually in as that a event a is it’s the flow. somewhat a normal structure. what there

EBITDA kept And on so negative and annual there a it’s we’re on basis an looked at zero it for is to make a an basically basis. if annual at easy, – the,

– happens pay cash flow, would which don’t are we to full at the see we we that pay – what that what the monthly have year, in the We’ll hotel looking we’re negative is is anticipation the for if at have shortfalls XXXX. point. wouldn’t XXXX, So,

Got Thank it. you. Helpful.

Thanks, Mike.

from And the Anthony next right. question with Barclays. All Powell is

in Hi, leisure in the of down the terms to operating how in question good you morning. cash the corporate October, locations? of or the in bring that customers? able some the at properties, August And opened in those larger those doing The are actually and size trends are markets, attracting on either you burn given hotels

Specifically is your question? corporate Anthony that customers, to

those are or not in which open. and of that more general. mean, are markets less hotels some I yes, of large kind Customers

properties bring curious you’re the I’m to able just down cash those in locations? the burn how and given So, size

increase Most – of it’s occupancy pretty our hotels reopened and when it’s mean, reopened, up mid they not single-digit to there. typical slowly. from see they I then

it downtown anyway. it Oceans very hasn’t very occupancies weather have some and certain days, obviously, that Edge located XX%, what quickly Some got XX% to there’s like we Other XX%, weak and ramped issues when held reopened properties, business normally that up out seasonality and while have you. seek quickly we or business business we non-traditional properties on quickly of and the business of to but that Others fairly would up off type because a not started grow. or found found hotel, taken traditional either have

lower partners on occupancies focus cutting because the outcomes. very though about same operating the range we or in general, was wide it’s expenses. burn ever So, currently thought than to strongly of much and efforts Herculean thing we One our possible of operating are reopen it’s at our I’d keep to potential these say, level, the a of cash feel hotels able low occupancies,

has X%, us, Now not heavily reopen of more say which to unfortunately, that us. lose on lot the work, any people means these occupancy money X%, of but let’s hotels, out been surprising a ability to weighs X% and

about is, site The strongly And true. when is is inspections more at that other are captures hotel. our open feel it business open. so hotel a closed but an hotels seems than to abundantly note thing And that doing we they we are obvious,

contract that again, business, factor up because going up We allowed it’s we business of pick it’s we have pieces that to in but been And a would a are of not has capturing pieces us otherwise. are straight open. not positive line,

the Understand. the matured be maybe, on you Thanks. talked I would the an just this loan ago, earlier. few update Square, about you’ve update Hilton great. days think Times a whatever current Can there And provide

Hey, Anthony.

lender We this time. to we continue on anything with Square, Hilton work don’t Times to update at our the but at resolution have

resolution, don’t to time, appropriate come now. we a any that update we’ll we as soon make have disclosures right the at but As

you. Thank right. All

Thanks, Anthony.

next right. the And from question All Rich Evercore. is with Hightower

Hey, good there, morning guys. out

Rich. Hey,

for issue anticipate wave pretty of you prepared the or but putting well it’s about of purposes comments well. we’ve to part Why the you tremendous a analyst why or on times don’t just some on hopefully, and Sunstone’s there back into before, if what is across a to John, you obviously, do research And you do of not? know the investment everything think a lodging plenty the space? want a of need the old moment go future world, topic advantage capital equity you of are as REIT form other common a some the moving for discussed mind? your I second, based maybe, – of parts lack do at but to add common competitive and equity issuance

feel the In It longer ever Those can’t in highly highly, leverage had strikes in that appropriate asset one speak one our it of in fundamentals our balance one people was me a it that that on have – do now, that I unprecedented an where unlikely only price think space up and for event, comfortable others, on going this, didn’t gaining permanent that wanted of it to sheet given taking we Let now was the one wanted before low. operating It’s I to shore We issue why likely downturn thought fundamentally significantly time, you’re because anything recovery we way be speak so none down our that have me to in sheets is sins what balance were we issue seen. can equity fact, done by depending to sales, that the take is probably a and are we’ve and just equity was sit to the right avoid imagined we you that I takes of to reducing causes avoid some is leverage. that things the greatest left us anticipate downturn is cheap, leverage, so is of the ways comfortable dilution liquidity, and general. told which than which worse that that left. That is right by but – that stretched. issuing highly, done us larger could to on equity. probably have other very at. liquidity going appears issue, equity term but issuing but issuing take and the I be time will two, or can earnings we many feel

in only through extended but unanticipated enough line cash as million said we prepared I have we cash, assuming fact, towards we even even to past burn, put time, probably this have an remarks, do after enough cash that $XXX draws, In believe my we could – not cash that at a investments. see cushion of cash for that hard least not

unless million, capital see considerably have Now, maybe but the this gives need I if on $XXX don’t other sources. as sit than to we price longer desire us Like that share through don’t I our issue or increases today, raise opportunity just anticipated, anybody equity. to here goes massively, enough

rather point not differently, our equity In point. be fact, a buyer of this very I much at equity, this say seller would of a at

a future but extend other Thanks than we back question having around point dividend for My well a is very XXXX, financial between based where it call Got pay the to into the recovery, mean, whatever need going it comments. NOLs, several from it pay it. not XXXX. your very balance different but crisis a point the those different that’s company you common policy company, from I’m and years. into Sunstone the the decade global that for sit common foresee prevented and to ago some some to dividend do to medium sheet, a look to more you’re just going able term? when situation, at expectations let’s was same on dividend a and Again, maybe, today, I you how do at now think is for the

Yes. Rich, very interesting conversation.

it highlight to exactly in all for a simple quarterly number. type out thought ever things had pick we downturn out, a first dividend incremental this $X.XX in pay pay had very very the the it income, paying that dividends we could would do be scenario. taxable And dividend we have And and of dividend let’s lot have we in was dividend, better strategy not have out a the this event, pay have inside that the into $X.XX, this to to extent We year, that, scenario, we just third unusual we we’d if Maybe, would constant not that other strategy that of out to if the out that any dividend. and a policy a paying us our started probably would that had let’s pulled topper but say to wish XXX% taxable We $X.XX, or of quarter. say of gone small have built larger used of paying XX% magnitude was try a policy and out back I I quarter we policy would much for out, liquidity. second then our not, company out of we expect or dividend maybe, would and effectively put that dividend a as been holding thought pay income.

right at the this and has of that volatility approach it’s – company to of level way this stream all. changing our in that dividend this industry dividend dividend that has a level do earning the think for strategy strategy I not see we I the

Okay, got it. Thanks.

you. Thank

And your Jefferies. with question Katz David is from next

Hi, everyone. thanks question. for taking my

Hey, David.

value, next know. you and of it the but think the was about an and we value couple terminal of were we of years, Hey, about how exercise doing cities affected think or we half obviously, years, to putting but urban how terminal lot dozen and sort we’re would today, the any impaired asset, and of we’re easier and thinking a awful the look, you to five wanted you’ve XX we’d value the cash that notion next flows, ground, an also on I terminal then is that my way with pose know next sitting an top covered what pick value sense if value is, little what in today? years, have do that time down

in what out values was whether terminal evaluation went I we so an years now six, five, question value there, from are exercise? think that’s if and out your say, seven really,

Yes.

general, this with value would more. and David been I’m of likely There’s in suggest question. the really that actually, terminal is that yields. good premium put the market heads where has that Well, a What too that lower. as that with the value that parts struggle that for answer overall system think of and of terminal to is hotels dropping the liquidity not and with into me I all the say is probably struggling be is that continue might I going risk if think much,

right. All

think now, had debate, I argument. probably guess a very but I’d it’s lean to to latter right I if good the

Good it. Right, luck. much. I appreciate very Thanks okay.

Thank you.

Woronka question Chris Deutsche from with the next And is Bank.

Hey, morning, guys. good

Hey, Chris.

Hey, good morning, John.

a down not – Just out of pay. during to the period? to you you to turnaround the said effectively high-quality product you’d point a on there’s story price open lot circle offense Are going you a renovate back that at radar? what a right some on back right at understand very acquisitions, Is there could on that now, now given even

I on So, value record we resources good very think add, the our track have is in-house. and

value I good, think the is track long-term us add record doesn’t scare with a view.

team find which time, design way before. able management asset Chris, renovation we if we’ve done look even it. by and the the getting a honestly, at and construction designing we were before we’ve sourced closed, So, something, now, team our was ever to by would

out, In would bought think labor times onsite bit. it Marc, out looking couple laughing it actually get little are Marc a plan It to at the working. now. and fact, and We’ve get of and time I get I done I’m renovation, take a some it

things I’d know feasible say while of how to is. something while are get yes, close So, quite add love to quiet. we it Realistically, some value quickly could and that I don’t

projects. other accelerating we’re said, that having Now

There’s mindset not the are anticipate our other about it. the a rather while our that mindset distant quiet. and projects have so We is than And capital will that I announce, first talking where we things the they’re specific, year to going accelerate where capital. future if and you is do next have capital projects. the be certain most time sense something quiet. of now are have the capital no to makes than we do It it to if now, planned you to better you half have couple

is, a and other of are these of how change. On it’s permanent now. and mean, kind XXXX a that ball? to get going about going also the I services that but Yes. for still everybody’s play side you much of easy out, mean, brands the and working helpful. kind sounds understand the And direction? you are think XX% of easy – said down real to going it’s to everyone I right the or of about. rethinking of you brands some talks sure. I do I of with like back things, to do Yes, Very back the revenues. then shared that go different to we’ve together, think and the cost some work they guess And operational model

I’m comment optimistic. your think I merit, but some has

that those day many those We changes long those changes in we conversations a be and I and achieve lived. are am of optimistic will will every

in people your sometimes So, have think point it’s downturns things maybe conversations hear to get as and I but they’re better I about sustainable. easier these forget,

a macro they in guess I follow-up on costs or John, years? have do is the a labor worldview those of kind think on same can quick I stay Okay. five three going mean, a in lines, change along our you down per-employee mean, basis? to next And I do to you something the

be general – money in near-term, wage in general there’s to staying abundance think just there’s to right of labor, the be And lot in paying, look of cetera. an I paying very contained, staying growth I now more. not is a pretty think et are wages

done in what’s with whether move the bottom being what’s up level at see to country earners. a to state it’s there a However, initiatives very on level, pull see going community living having think the wage that level, on wage said, I it’s end realistic see going is and of corporate that to

there. passed So, ago tell Disney, called $XX just think initiative. they we’ve we’re that that’s We’ve wage, we’ve after don’t maybe, by it gotten and wage there for living if been year move a but the for or I number know to but a I two already it would there. was made of example, that a I years. living awhile led Florida Orlando market you specifically up certain get

of made to there moves, So, to wage a will say I over but I’m continue glad we have those pressure lot already time. think be

John. all Thanks, the Appreciate color. Okay.

Yes. Thank you, Chris.

to are remarks. John to the turn I’d Arabia like there time. right. at closing no this for back All now additional further any conference appears And or questions it

day been everybody. you long in getting again, through a calls. you lot I one. it’s this of the world a know through Thank sticking hotel appreciate really earnings We

ring. a have any a questions, everybody. are office. Thanks great Have weekend. the follow-up you here give we in If us Please

today’s call. Thank concludes participation. This for you your

disconnect. now may You